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Sunday, November 24, 2013

Master Bank Closed In Russia

Anxious customers gathered outside Master bank closed doors, millions of credit cards suddenly off the abrupt closure of Master Bank this week has plunged the Russians in the most traumatic of the post- Soviet period hours.
The central bank withdrew the license of the Master bank Wednesday with immediate effect. The bank was established in 1992 and which has in its Board of Directors Igor Putin, the Russian president 's cousin .
The regulator said that they have no other choice after finding the violation on money laundering “repeated violations" , the Ministry of the Interior evaluating the sums involved more than 45 million.

At first glance, Master Bank is the 70th Russian bank in terms of assets hence it may seems that it is a relatively small institution.
But “this is the first time a bank with more than three million customers lost its license," he said at a press conference Oleg Ivanov, vice president of the Association of regional banks.
And consequences for the general public were eye souring, as Master Bank controls one third of the ATM network in Russia and ranks fifth in terms of total credit cards in circulation.
Suddenly, millions of Russians were left without access to their account. Others who thought they had no connection with Master Bank, have seen their credit card stop working all of a sudden and the bank offered its services data processing 200 other small establishments.

Numerous shops, hotels, restaurants, as well as the liberal political party Yabloko were using his credit card to pay the salaries of their employees, who find themselves stranded.
Notable difference resounding bank failures of the 1990s, most customers should recover much of their funds: Since 2004, the deposits are insured up to 700,000 rubles (15,700 Euros). Beyond this threshold, the holders have priority to be compensated at the end of the bankruptcy proceedings.
The news has had a considerable impact in Russia, where a portion of the population keeps the painful memory of flights in bank failures, especially during the 1998 financial crisis economies, and is suspicious with respect to banks.